The author of Wild Swans and her historian husband, Jon Halliday, have torn away the many masks and falsehoods with which Mao and the Communist party of China to this day have hidden the true picture of Mao the man and Mao the ruler. Mao now stands revealed as one of the greatest monsters of the 20th century alongside Hitler and Stalin. Indeed, in terms of sheer numbers of deaths for which he responsible, Mao, with some 70 million, exceeded both.

Far from being the first Chinese communist leader to stand up for the Chinese peasantry and to respond to their needs and lead them out of exploitation, Mao is exposed as a man who disdained the peasants, despite his protestations to the contrary. He is shown during his command of armed forces in the countryside in the late 1920s and early 30s to have lived off the produce of the local peasants to the extent of leaving them destitute. He consciously used terror as a means to enforce his will on the party and on the people who came under his rule. In the course of the Long March, Mao is shown to have had no qualms in sacrificing thousands of scarce fighting men in fruitless diversions to serve no other purpose than to advance his bid for leadership.

His callous disregard for the lives of comrades and fellow Chinese became more evident once he commanded the larger stage of China itself. Against the advice of his commanders on the ground, Mao persisted in prolonging the Korean war in the expectation of tying down hundreds of thousands of American troops, regardless of the disproportionate sacrifice of far greater Chinese casualties. The livelihood of China's peasants was tightly squeezed through most of Mao's rule, not simply to meet the needs of industry and the urban population, but also to pay the Soviet Union and the east Europeans for the development of advanced weapons - especially for the development of nuclear weapons.

The suffering of the peasants plumbed new depths during Mao's hare-brained scheme to overtake Britain and the United States in the disaster known as the Great Leap Forward, which led to the starvation and premature deaths of 30-40 million people. To the end of his life Mao continued to sacrifice the Chinese people in his search for superpower status.

Chang and Halliday cast new and revealing light on nearly every episode in Mao's tumultuous life. Among the most significant of their discoveries is that the myth of the Long March was a sham. Chiang Kai-shek in effect made a safe passage for the Reds through particular provinces where his rule was weak, so that his pursuing forces could overcome the local warlords. Moreover, Chiang was constrained from destroying the Reds because his son was held hostage in Moscow. Even the fabled crossing of the Dadu chain bridge, when, according to Mao, his heroic soldiers managed to cross the narrow bridge against heavy machine-gun fire, is shown to be a complete invention. The indefatigable authors consulted Nationalist sources, interviewed local historians and even visited the scene.

Mao is shown to have been completely dependent on Soviet support and to have taken the view that the Chinese communists would succeed only if they were able to link up with the Soviet Union and receive massive assistance. This eventually happened in Manchuria in 1946-47. The American General Marshall, who had attempted to mediate in the civil war, had unwittingly saved the communist armies by imposing a truce in the summer of 1946 that lasted for four months. It was this truce that prevented Chiang's armies from crushing the retreating Reds. The ceasefire enabled the latter to be massively replenished by the Soviet side and then reverse the tide to win in Manchuria and then gain the rest of China.

Some of the distortions of history perpetrated by Mao and the Communist party have already been exposed by western and Chinese scholars. They have had access to writings and documents released by Chinese party historians, and their studies have also been enriched by access to archives from the former communist bloc, notably those in Moscow.

Chang and Halliday have not only made full use of this literature, but judging from their notes, they have spent the past 11 years going through the archives themselves, some of them in countries whose records had not been examined for this purpose before. They have also used their contacts in China to interview an extraordinary array of people who were close to Mao and other leaders. These range from family members to friends, colleagues, secretaries, witnesses and even a woman who once washed Mao's underwear. Consequently, the authors are able to shed new light on virtually every episode of Mao's life. For example, it has been known for some time that one of the dirty secrets of Yenan was that opium was produced and marketed from there. The authors show how this enriched those at the top and built up the reserves of the local government, and alleviated some the depredations made on the peasantry - but they also show how the inflation caused by the opium money made things worse, too.

Mao himself comes across as a uniquely self-centred man whose strength was his utter disregard for others, his pitilessness, his single-mindedness, his capacity for intrigue and his ability to exploit weakness. He neglected his wives, whom he treated cruelly, and had no time for his children. He loved food and reading and had an infinite supply of young women. Mao lacked personal courage and had some 50 villas built for him in different parts of China, which were constructed to withstand bombing and even nuclear attack.

Mao had none of the skills usually associated with a successful revolutionary leader. He was no orator and he lacked either idealism or a clear ideology. He was not even a particularly good organiser. But he was driven by a personal lust for power. He came to dominate his colleagues through a mixture of blackmail and terror. And he seems to have enjoyed every minute of it. Indeed what he learned from his witnessing of a peasant uprising in his home province of Hunan in 1927 was that he derived a sadistic pleasure from seeing people put to death in horrible ways and generally being terrified. During the Cultural Revolution he watched films of the violence and of colleagues being tortured.

The use of terror typified Mao's rule. Although he had his equivalent of the KGB, Mao's distinctive form of terror was to get people to use it against each other. This was the model that he perfected in Yenan, when everybody was coerced into the exercise of criticism and self-criticism by which they were forced to confess and implicate each other in terrible "wrongs". It was a method that was then extended to the whole of China, as people were confined to their work units in the cities and their villages in the countryside.

This magnificent book is not without its blemishes. There is no discussion of the quality of the sources or how they were used. The motives of people in general and of Mao in particular are asserted rather than evaluated. There is no introduction or concluding chapter to bring together the key themes of the book. Nevertheless it is a stupendous work and one hopes that it will be brought before the Chinese people, who still claim to venerate the man and who have yet to come to terms with their own history, even as they require others to do so.

• Michael Yahuda is professor emeritus at the London School of Economics and visiting scholar, George Washington University